Enabling Technologies for SMART MOBILITY

Topics Global Mega & Automotive trends Impact to Automotive OEMs HORIBA Cultural Philosophy HORIBA Enabling Technologies Your invitation 2018 HORIBA, Ltd. All rights reserved. Everything begins with measurement. HORIBA s Measurement Technologies and analysis solutions are always at the front lines of innovation. 2

Global mega trend influencing the automotive industry 12 key automotive trends Global mega & automotive trends interact & reinforce key product attributes / services which will be critical in defining the future of the market Independently identified global mega trends Independently identified automotive trends Report analysis & synthesis Report analysis & synthesis Connectivity (Con) Emerging markets (EM) New competition (NC) New business models (NBM) Mobility as a service (MaaS) Electro-mobility (xev) Regulation (Reg) Collaboration & partnerships (C&P) Autonomous vehicles (AV) Big data & Analytics (BD&A) Cyber & data security (C&DS) Skills shortage (SS) Urbanisation (U) Rapid technology change (T) Shift in demographics (D) Macro resource pressure (RP) Climate change (CC) Shifts in economic power (EP) Influence on Automotive Illustration by 2025 >60% of the population will live in urban cities, with >30 mega cities Internet users ~5billion, Connected devices ~75billion. Transformation driven by aging population & millennial workforce Population growth & climate change increase stress on resources Desire to reduce GHG, noxious gases & nano-particles ~50% of the world s $billion + companies based in emerging markets & 46 of the top 200 cities will be in China Strength Con EM MaaS BD&A AV NC xev C&P Reg NBM C&DS SS 5-6 key trends Measurement and Analysis technologies will enable the progress Source: MIRA, HP, OECD, Booz Allen Hamilton, BCG, Frost & Sullivan, KPMG, Roland Berger, PWC (Strategy&), McKinsey & Company, EY 2018 HORIBA, Ltd. All rights reserved. May 2, 2018 4

Headline: Reductions in national and city-level regulated emission levels are expected and nanoparticles & VOCs will come under increasing scrutiny Regulation & Electro-mobility 2025-2030 scenario Electro-mobility Connectivity Regulation Further GHG reductions expected. Will include well-to-wheel and life-cycle assessments Nano-particles & VOCs are expected to be the next areas for control and reductions Noxious emissions limits plateaued with China & India almost harmonized with the developed economies Cities set vehicle & emissions limits to improve local air quality Autonomous Veh. Mobility as a Service Regulation remains a principle driver of electro-mobility (xevs) penetration Regulators remain distrustful of OEMs ~10 years after Diesel-gate scandal ICE remains in >80% of vehicles by 2025 BEV penetration will be 10%-20% xev penetration will be 30%-60% Fuel cells remain a niche in 2025 Majority of OEMs offer a wide variety of hybrids and BEV only vehicles, with most offering multiple xev Powertrains variants Uncoordinated infrastructure roll-out risks delayed EV acceptance Source: MIRA, McKinsey & Company, EY, Ricardo, PWC (Strategy&), KPMG, Roland Berger 2018 HORIBA, Ltd. All rights reserved. May 2, 2018 5

Headline: Connectivity, MaaS & Autonomous vehicles are all interlinked with cyber security central to delivering successful robust products Connectivity, Mobility & Autonomous 2025-2030 scenario Global ADAS market will grow to $26 billion by 2025 By 2025, 80% of the top ten OEMs will have or will be launching highly autonomous vehicles By 2030, up to 15% of the market could be fully autonomous (L4) Annual global vehicles sales net effect of MaaS Global mobility ~$10 trill market MaaS - most applicable to high density urban living ~3 bill people MaaS to reduce the cost of transport (from ~$1 to ~$0.3/mile) challenging ownership models MaaS may reduce global vehicle sales by ~13 million units (2030) Cyber security is not one of the core product areas driven by the trends but it will be at the heart of products with connectivity, autonomous capabilities & mobility as a service offerings 2025 = 100% of cars connected Enables new revenue streams related to MaaS, OTA updates, service fees; data monetisation Revenue stream = ~$500 billion (2025) & ~$1.5 trillion (2030) Digital revenues expected to be greater than vehicle hardware revenues Source: MIRA, Accenture, Bain, Deloitte, Morgan Stanley, Roland Berger, KPMG, PWC (Strategy&), McKinsey & Company, EY 2018 HORIBA, Ltd. All rights reserved. May 2, 2018 6

Diesel decimated, massive growth in xev, but unprecedented levels of investment for battery production required EVs: ~20% in 2025 & >50% in 2030 Massive growth in EV and xev products across major markets Diesel decimated. Niche application on SUV & large saloons. FCEV niche Source: MIRA, vehicle OEMs, PWC (Strategy&), Ricardo, McKinsey & Company, * industry wide May 2, 2018 7

Impact - The trends are putting the OEMs under increasing strategic & operational stress 2 Organisation Collaboration & partnerships Big data & Analytics New business models Cyber & data security 1 Product Autonomous vehicles 3 Competition Electrification - xev Connectivity Regulation Cyber & data security Mobility (enablers hard + software) OEMs New (ICT) competition Skills shortage ( war-on-talent ) Emerging markets Source: MIRA 2018 HORIBA, Ltd. All rights reserved. ICT = Information, communications and technology companies: A collective term referring to silicon valley type companies e.g Apple / Uber / Google May 2, 2018 8

HORIBA - Philosophy CUSTOMERS AA The motto originates from the belief that if we take interest and pride in the work that occupies most of the active time in our lives, in the place where we spend the large part of each day, then as a result our satisfaction with life will increase, and we will be able to enjoy our lives even more. Taking interest and pride in our work leads us to Joy and Fun. At the heart of our business is our customers and stakeholders Measurement Technologies is our vehicle to success Dr Masao HORIBA founded HORIBA in 1947 Omoshiro-Okashiku 2018 HORIBA, Ltd. All rights reserved. 9

HORIBA Enabling Technologies Scientific Semiconductor Process & Environmental Automotive Test Systems www.enerjiportali.com/enerji-yazarlari/cuneyt-selcuk-gungor/2050-yili-enerji-uretimi-tahminler/&psig=aovvaw0nrsrpqtyfacbjcnvzzmc6&ust=1521816778687899 http://://www.energylivenews.com/2016/01/29/energy-storage-batteries-worth-3-6-billion/&psig=aovvaw3t4kdie9o0ttilqkgep9ft&ust=1521813980332490 http://www.bosch.com.ph/en/ph/sustainability_innovation_7/electromobility_10/electromobility.html

Enabling Technologies Automotive Engineering Providing powerful support to the automotive development industry HORIBA s automotive EMS (Emission Measurement Systems) are used by national certification bodies throughout the world and hold a global market share of 80%*. HORIBA provides complete test and measurement solutions to the world s leading automotive manufacturers, including test systems for chassis, engines, power trains, catalysts and brakes. In July 2015 HORIBA acquired HORIBA MIRA, Ltd., a U.K. registered vehicle engineering consultancy and testing services provider. With the addition of HORIBA MIRA, Ltd., the company has expanded beyond analysis and measurement to include the Engineering Consultancy & Testing (ECT) business. It is now well positioned to respond to diverse customer demands as future mobility requirements expand to include advanced vehicle performance, autonomous vehicle development, battery development and general vehicle R&D challenges. Regulation & Electro-mobility Connectivity, Mobility & Autonomous Electro-mobility Connectivity Regulation Autonomous Veh. Mobility as a Service Principal Products and Services Emission measurement systems Automotive emission analysers On-board emission measurement systems Driveline test systems Engine test systems Brake test systems Drive recorders Vehicle development engineering Testing engineering Lease and management of R&D facilities

Enabling Technologies Flow Control & Measurement Contributing to yield enhancement and technology innovation in semiconductor manufacturing processes HORIBA s flow control and measurement technologies are enabling the manufacturers of next generation automotive semiconductors, batteries, displays, LED s, and coated plastics. These high-precision gas and liquid controllers regulate flow rates in component manufacturing processes. They are indispensable components for high quality semiconductor and LED production. Our Chemical Concentration Monitors are used in semiconductor manufacturing to monitor concentrations of chemical cleaning agents. They ensure cleaning fluids are precisely delivered and properly used, thereby optimizing the cleaning process and boosting production yields. We own approximately 60% market share. Connectivity, E-mobility & Autonomous Electro-mobility Connectivity Autonomous Veh. Mobility as a Service

Enabling Technologies Scientific Instruments Scientific Instruments & Systems for use at the leading edge of scientific technology HORIBA s analysers provide solutions for data acquisition and analysis for advanced research and pursuit of innovative products and processes that will enhance our lives and the world that surrounds us. Our instruments are used in energy, automotive industries, materials science, semiconductor processing and batteries. HORIBA s analysers use gas analysis by infrared rays, X-ray solid analysis, and dispersion technologies such as Raman or fluorescence spectroscopy.. HORIBA s analysers are widely used in basic research, foreign-object examination and defect analysis for electronic components, The segment develops basic analytical methods and core measurement technologies. Regulation & Electro-mobility Connectivity, Mobility & Autonomous Electro-mobility Connectivity Regulation Autonomous Veh. Mobility as a Service HORIBA s air pollution analysers have won high acclaim in the field as highly reliable analysers that demonstrate excellent precision and long-term stability at ppb* concentrations. They are used in over 50 countries to monitor air quality by municipal governments and private industries. Demand has been expanding for PM2.5-related monitoring.

Our Future Together. Continuous investment to accelerate growth Proactively facing the changing trends in the automotive industry and mobility with our Measurement Technologies Investing to respond to an increase in demand in the semiconductor industry Accelerating multiple technology solutions Chairman & CEO Atsushi Horiba HORIBA operates five business segments in 27 countries providing indispensible products and solutions.

Your invitation to join us Visit our stand. Hall 27 G55 Take the driving challenge Meet our team of Japanese and German colleagues Discuss HORIBA s Enabling Technologies We want to hear about how we can help you? Enjoy Happy Hour 1700hrs 1800hrs Hall 27 Stand G55 EXPLORE THE FUTURE

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